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The opinions expressed in this letter represent the views of a majority of Roundtable Members, but not necessarily all of our m embers. July 15, 2011

The Honorabl e Lisa P. Jackson, Administrator U.S. Environmental Protection Agency Ariel Rios Building 1200 Pennsylvania Avenue, N.W.

Mail Code: 1101A Washington, DC 20460

RE: National Emission Standards for Hazardous Air Pollutants-- Reconsideration

Dear Administrator Jackson:

On March 21, 2011, the Environmental Protection Ag ency (EPA) published a new rule under the Clean Air Act (CAA), entitled “ National Emission Standards for Hazardous Air Pollutants for Major Sources:
Industrial, Commercial, and Ins titutional Boilers and Process Heaters ” (“Boiler MACT”) 1 . At the same time, the Agency announced its intention to initiate reconsideration of the rule

. 2

I am writing, on behalf of the multi-sector membersh ip of the Western Business Roundtable, to thank the Agency for its reconsideration of the “Boiler MACT ” rule. For all the reasons outlined in these comments, we strongly urge the Agency to rescind the rule and start over.

The Boiler MACT rule requires the use of Maximu m Achievable Control Technology (“MACT”) for reducing hazardous air pollutant (“HAP”) emissions from institutional, commerc ial and industrial boilers. Boiler MACT will apply to boilers located at “major” sources of HAPs (those emitting 10 tons per year or more of a single HAP or 25 tons per year of any combination of HAPs). According to EPA, there are approximately 13,800 “major source” boilers, mostly located at large industrial facilities or manufacturing plants.

EPA plans to use a companion rulemaking, the “Area Source Rule,” to regulate minor sources of HAPs. The Area Source Rule will affect a variety of faciliti es, both industrial and non-industrial. EPA estimates about 187,000 minor sources (including facilities such as restaurants, schools, churches, farms, etc.) currently exist.

Boiler MACT is terribly complex. It involves controls/monitoring standards for 11 subcategories of boilers and process heaters that vary in design a nd fuel type. Sources will be required to conduct emissions testing and comply with standards of contro l that vary by boiler size, feedstock and available technologies. For most major facilities pulled unde r Boiler MACT, compliance will require either switching fuels or installation of multiple emissions-control technologies.

1 76 Fed. Reg. 15,554, March 21, 2011

2 76 Fed. Reg. 15,266, March 21, 2011Our comments focus on the triple set of flaws we find most troubling about Boiler MACT: it was crafted under a distorted regulatory process/timeline; it is tec hnically flawed; left unchanged, the rule will be extremely costly to the nation’s industrial and manufacturing sectors and, ultimately, the U.S. economy.



### ABOUT THE ROUNDTABLE

The Roundtable is a broad-based coalition of compan ies doing business in the Western United States. Our members are engaged in a wide array of en terprises including: engineering, construction, communications, manufacturing, retail sales, refining, iron and steel, mining, electric power generation, and oil and gas exploration, development and distributi on. We work to defend the interests of the West and support policies that encourage economic growth and opportunity, freedom of enterprise and a sound approach to conservation and environmental preservation.

The Boiler MACT rule poses very real challenges for Western industrial operations, many of which depend on the region’s abundant coal resources to fuel their boilers.



### REGULATORY PROCESS CONCERNS

Boiler MACT is a cautionary tale for why the grow ing trend of using courts to dictate regulatory outcomes – which has come to be known as “regulati on by consent order” – is so dangerous. Here, Agency actions have been driven by advocacy groups and federal courts, not good data. The process is so distorted that the Agency itself has been forced to distance itsel f from its own regulatory product.

In filings with the D.C. District Court seeking an extension of time for the rulemaking process, EPA

noted it “ received over 4,800 individual comments ” in response to the proposed standards that “ raise[d] issues that EPA had not fully considered and also pr ovided substantial additional data that raise questions about some of th e Agency’s initial conclusions. ” 3 EPA admitted that comments filed “ may materially affect important decisions relating to source categorizations and coverage for the final

emissions standards.” 4

While EPA tried to get court approval to extend the de adline for issuance of the rule, the Court refused. Thus, EPA was forced to move forward with issuan ce of regulations it openly admitted are technically

flawed.

It is this kind of process distortion that has spurred the growing push for federal regulatory reform. As we detailed in our recent filing with EPA regarding its regulatory reform pl an, we are very concerned by EPA’s overall approach to decision-making, which is indicative of a broader trend exhibited across the Obama Administration: the side-stepping of formal rulemaking processes set forth in the Administrative Procedures Act (“APA”) and various enabling statutes in favor of unilateral regulation through the use of Executive Orders, Secretarial Orders, agency guidance , interim rules, draft policies, reinterpretation policies and, yes, legal “consent agreements.” 5

3 EPA Motion for Extension 2, Sierra Club v. Jackson , No. 1:01CV01537 (D.D.C Dec. 7, 2010)

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5 Roundtable Comments, EPA Request for Comments on Impr oving EPA Regulations, Pursuant to Executive Order 13563, “ Improving Regulation and Regulatory Review ,” April 4, 2011 http://www.westernroundtable.com/Porta ls/0/Docs/RegReform /WBRT_comments_EPA_RegReform_4-11_FINAL.pdf

### TECHNICAL CONCERNS

The Boiler MACT rule includes emission standards fo r mercury, particulate matter (PM) as a surrogate for non-mercury metals, and carbon monoxide (CO) as a surrogate for organic HAP. Emissions of hydrogen chloride and dioxins and furans w ould also be regulated at major sources.

The Council of Industrial Boiler Owners (CIBO) filed a petition for reconsideration of the Rule on May 20, 2011. That document lays out, in detail, the fu ll range of technical problems with the Boiler MACT rule. The Roundtable wishes to incorporate those concerns, by reference, into our comments here. 6

We would like to emphasize several threshold pr oblems with EPA’s approach under Boiler MACT:

 EPA Set Unrealistic Standards Ba sed on Theoretical Scenarios

The biggest problem with Boiler MACT is the f act that EPA cherry-picked the so-called “best performing” sources upon which to base the sta ndards. Worse yet, it set MACT based on

unrealistic criteria.

Under CAA, MACT standards for existing sources must be at least as stringent as the emissions achieved by the best-performing 12 percent of existing sources in the relevant category or subcategory. The standards for new sources cannot be less stringent than the controls achieved by

the best-controlled similar source.

Here, EPA did something different. It formulat ed the standards based on the “best performing” emissions levels for each pollutant—not emissions in the aggregate for the source. The result was a performance level no source can meet. In fact , EPA has had to admit that none of the best performers evaluated by the Agency can meet th e new limits for all the regulated emissions.

Clearly, EPA needs to go back to the drawing board . Any standard needs to reflect the “best of class” among actual boilers, not the hypothetical boi ler used as a basis for the standards in this

rule.

 EPA Fails to Support Its Decision to Use PM as a Surrogate

EPA elected to use PM as a surrogate for th e emissions of non-mercury metallic HAPs from industrial boilers and process heaters. Howeve r, as EPA acknowledges, metallic HAP emissions are “fuel-based pollutants” that are direct results of contaminants in the fuels that are combusted. 7

Contaminants in a fuel do not establish a r easonable correlation between metallic HAPs and PM emissions, and in the absence of such a correlati on the use of a surrogate is not justified.

 EPA Applied a “No-Threshold” Standard

EPA utilized a “no-threshold” standard to the regul ation: emissions are treated as if they cause health effects at any level of exposure. That makes the emissions limits much more strict (and

6 CIBO petition for EPA reconsideration: http://www.cibo.org/pu bs/b mactpetition.pdf

7 76 Fed. Reg. 15612more costly) than they would have been under a “health-based” standard (i.e. a standard that recognizes some level below which exposure is not a health concern). EPA claims it lacks the information necessary to set health -based standards. If that is true , on what basis does the Agency

calculate the health benefits of the rule?



### ECONOMIC CONCERNS

A study by the economic forecasting firm IHS Global Insight, prepared for the Council of Industrial Boiler Owners, put the cost of Boiler MACT at $20 billion.

The industrial and manufacturing sectors are major sour ces of domestic jobs and produce products crucial to the U.S. economy. This rule, especially when combined with a variety of other oppressive rules emanating from EPA and other agencies, are draining these sectors of the resources they need to survive.

Particularly instructive on this point are analyses put together by a number of the industries that would be forced to comply. We ask that you give careful consideration to the following:

 CIBO has done detailed analysis of what the comp liance costs would be for various categories of

boilers. 8

 On April 27, 2011, a broad cross-section of industries impacted by the rule filed a petition for administrative stay, pending reconsideration with the Agency. As part of that filing, each industry provided an analysis of the impacts for its sector. 9

The capital costs to install expansive new emissions controls come at the expense of investments in productivity. In many cases, the costs are prohibitive enough to such cause plant closures and job losses. To the extent the regulatory costs reduce output, suppliers would also be affected. The economic ripples would quickly extend to the broader economy...an economy that is already anemic at best.



### CONCLUSION

For all the reasons outlined in these comments, we str ongly urge the Agency to rescind the rule and start

over.

Thank you for your consideration of these comments.

8 Analysis of impacts on various types of bo ilers, Council of Industrial Boiler Owners: http://www.cibo.org/issues.htm 9 Petition of Administrative Stay Pending Recons ideration, April 27, 2011, Appendix 1 -- Th e American Forest & Paper Association, National
Association of Manufacturers, American Chem istry Council, American Coke and Coal Chem icals Institute, American Home Furnishings Alliance, American Iron and Steel Institute, American Municipal Power, Inc., American Petroleum Institute, American Wood Counci l, Biomass Power Association, U.S. Chamber of Commerce, Corn Refiners A ssociation, Council of Industrial Boiler Owners, Florida Sugar Indu stry (joined by sugarcane processors in Texas and Hawaii), National Oilseed Processors Association, Rubber Manufacturers Association, Societ y of Chemical

Manufacturers and Affiliate s, Treated Wood Council http://www.chamberlitigation.com/sites/default/files/cases/files/ 2011/Petition%20f or%20Administra tive%20Stay%20Pending%20Recons ideratio n%20of%20Boiler%20Rules%20%28NCLC%20Motion%29.pdfHolly Propst

Executive Director / General Counsel

Western Business Roundtable 14405 West Colfax Avenue, #159 Lakewood, CO 80401

1-800-410-1050